2009-10-22 07:30:00 CEST
2009-10-22 07:33:53 CEST
REGULATED INFORMATION
Wärtsilä - Interim report (Q1 and Q3)
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-SEPTEMBER 2009
Wärtsilä Corporation INTERIM REPORT 22 October 2009 at 8.30 local
time
THE CHALLENGING MARKET ENVIRONMENT CONTINUES
THIRD QUARTER HIGHLIGHTS
- Net sales grew 2% to EUR 1,167 million (1,140)
- Operating result grew to EUR 133 million (123), 11.4 % of net sales
(10.8)
- Earnings per share amounted to 0.87 euros (0.97)
- Order intake fell 48% to EUR 725 million (1,382)
- Cash flow from operating activities EUR 214 million (49)
HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-SEPTEMBER 2009
- Net sales EUR 3,741 million (3,082), growth 21%
- Operating result before nonrecurring restructuring items grew to
EUR 419 million (328), 11.2% of net sales (10.6). Including the
restructuring items, the operating result totalled EUR 413 million,
11.0% of net sales.
- Earnings per share amounted to 2.77 euros (2.42)
- Cash flow from operating activities EUR 142 million (255)
- Order intake EUR 2,468 million (4,750), a decrease of 48%
- Order book total EUR 5,351 million (7,762), a decrease of 31%
- Materialised order cancellations totalled EUR 279 million
OLE JOHANSSON, PRESIDENT AND CEO:"Wärtsilä's net sales were at a good level EUR 1,167 million and
profitability developed according to plan. Challenges in securing
financing continued to impact the ordering activity in Power Plants.
Looking ahead, the global need for flexible and environmentally sound
power generation and the quest for increased efficiency and better
energy security will clearly work in Wärtsilä's favour. Services
continued its stable development, with the extensive installed base
of Wärtsilä equipment and increasing number of operations &
management agreements creating a solid demand base. The marine market
continued to be challenging due to the large number of ships under
construction, and Ship Power orders remained at a low level.
Wärtsilä's activity in many segments of shipping is valuable as the
weakness in some segments is likely to continue at least another two
years. Once the broader recovery commences, the Asian shipbuilding
market will emerge stronger than earlier. These shifts in the market
require structural re-evaluation. Wärtsilä is preparing to optimise
its production to meet the changing business environment."
WÄRTSILÄ'S PROSPECTS FOR 2009 REITERATED
Despite the risk of cancellations and the nonrecurring restructuring
items booked in the second quarter, the order book for 2009 should
support a 10-20 percent growth in net sales for 2009, which would
maintain the profitability at last year's good level.
ANALYST AND PRESS CONFERENCE
An analyst and press conference will be held on Thursday 22 October
2009, at 10.45 a.m. Finnish time (8.45 a.m. UK time), at the Wärtsilä
headquarters in Helsinki, Finland. The combined web- and
teleconference will be held in English and can be viewed on the
internet at the following address:
http://194.100.179.139:80/wip/directlink.do?newbrowser=1&pid=2917866
To participate in the teleconference please call: +44 (0)20 7162 0077
and enter the Conference ID: 847675. If you want to ask questions
during the teleconference, press the number 1 on your phone to
register for a question and the # -key to withdraw a question. The
event title for the call is: Result Q3 External. Please be ready to
state your details and the name of the conference to the operator. If
problems occur, please press the *-key followed by the 0-key. We
would recommend that you would register to the conference in advance
at the following address:
https://eventreg1.conferencing.com/webportal3/reg.html?Acc=085460&Conf=168815
An on-demand version of the webcast will be available on the company
website later the same day.
Wärtsilä in brief
Wärtsilä is a global leader in complete lifecycle power solutions for
the marine and energy markets. By emphasising technological
innovation and total efficiency, Wärtsilä maximises the environmental
and economic performance of the vessels and power plants of its
customers. In 2008, Wärtsilä's net sales totalled EUR 4.6 billion
with 19,000 employees. The company has operations in 160 locations in
70 countries around the world. Wärtsilä is listed on the NASDAQ OMX
Helsinki, Finland.
INTERIM REPORT JANUARY-SEPTEMBER 2009
The figures in this interim report are unaudited.
THIRD QUARTER 7-9/2009 IN BRIEF
MEUR 7-9/2009 7-9/2008 Change
Order intake 725 1 382 -48%
Net sales 1 167 1 140 2%
Operating result 133 123 9%
% of net sales 11.4% 10.8%
Profit before taxes 125 127 -2%
Earnings/share, EUR 0.87 0.97
Cash flow from operating activities 214 49
REVIEW PERIOD JANUARY-SEPTEMBER 2009 IN BRIEF
MEUR 1-9/2009 1-9/2008 Change 2008
Order intake 2 468 4 750 -48% 5 573
Order book at the end of the period 5 351*) 7 762 -31% 6 883
Net sales 3 741 3 082 21% 4 612
Operating result (EBIT) before
nonrecurring restructuring items 419 328 28% 525
% of net sales 11.2% 10.6% 11.4%
Operating result 413
% of net sales 11.0%
Profit before taxes 388 333 16% 516
Earnings/share, EUR 2.77 2.42 3.88
Cash flow from operating activities 142 255 278
Interest-bearing net debt
at the end of the period 575 369 455
Gross capital expenditure 98 272 366
*) Cancellations amounting to EUR 279 million have been eliminated
form the order book during the review period January-September 2009.
MARKET DEVELOPMENT
SHIP POWER
The ship contracting is currently substantially below the high levels
of the past years. Despite the signs of recovery indicated by the
fundamentals in the world economy, the shipping industry still faces
problems with over supply within the major vessel segments. The
market activity seen during the recent months has mainly been
re-negotiations of existing orders.
There have been postponements in the deliveries of existing vessel
orders during the review period. The cancellation rate will probably
not reach the level estimated at the beginning of the year but the
market will still see considerable rescheduling of orders.
Ship Power market shares
Wärtsilä's market share in medium speed main engines decreased from
40% at the end of the previous quarter to 31%. The company's market
share in low speed main engines increased slightly to 13% (11). In
auxiliary engines the market shares dropped to 4% (6). Market shares
have become more sensitive to individual orders since the total
contracting volume is low.
POWER PLANTS
Difficulties in arranging financing continued to impact the ordering
activity during the review period. The offering activity continued at
a good level.
Power Plants market shares
According to statistics compiled by the Diesel and Gas Turbine
magazine, the global market for oil and gas power plants in
Wärtsilä's power range declined to 11,570 MW (20,980) between June
2008 and May 2009. The market for gas power plants, including both
reciprocating engines and gas turbines, declined to 7,090 MW
(15,630), Wärtsilä's share of the market being 13% (8%). The market
for heavy fuel oil plants decreased to 3,430 (4,050), Wärtsilä's
share being 46% (49). In light fuel oil plants the market decreased
to 1.050 MW (1,300) and Wärtsilä's market share was 3% (20). For
Wärtsilä the relevant markets for light fuel power plants are the
liquid bio-fuels where hardly any plants were ordered.
SERVICES
In the marine industry, the imbalance between vessel capacity and
vessel demand prevailed and continued impacting the marine services.
During the review period slow development was seen in Asia where
capacity adaption through the lay-up of vessels continued. In the
power plant services sector several projects are under development in
the fields of environmental upgrades and fuel conversions.
Wärtsilä's installed engine base in the Ship Power and Power Plant
markets totals over 160,000 MW and consists of thousands of
installations distributed throughout the world. Both end markets
consist of several customer segments for Services, and Wärtsilä's
portfolio is the broadest in the market. These factors limit the
impacts of fluctuations in any individual market or customer segment.
ORDER INTAKE
The Group order intake for the third quarter totalled EUR 725 million
(1,382), a decrease of 48%.
The order intake for Ship Power totalled EUR 68 million (450), 85%
below the corresponding period last year. During the quarter Wärtsilä
Ship Power booked orders in the Merchant and the Offshore segments,
49% and 3% of the total order intake respectively. Navy orders
represented 7% whereas Cruise&Ferry was 18%, Special vessels 17% and
Ship design 6%. The third quarter order intake remained at the same
level as in the second quarter of 2009 (EUR 67 million in the second
quarter of 2009). For the review period January-September 2009 Ship
Power's order intake was EUR 262 million (1,674), a decrease of 84%
from the corresponding period last year.
In the Power Plants business the continuing challenges in financing
for large projects resulted in lower than expected order intake for
the third quarter 2009. The order intake totalled EUR 170 million
(498), 66 % lower than the corresponding period last year. The order
intake was 34% lower than in the previous quarter. Small and medium
size projects for the industrial power generation segment were the
major contributors to the third quarter order intake. Orders were
received in among other Papua New Guinea, Turkey, Italy and
Greenland. For the review period January-September 2009 Power Plants'
order intake totalled EUR 748 million (1,620), a 54% decrease
compared to corresponding period last year.
Order intake for the Services business totalled EUR 483 million (434)
in the third quarter, a growth of 11% compared to the corresponding
period 2008. Compared to the second quarter, order intake grew by 5%
(EUR 458 million in the second quarter of 2009). Wärtsilä signed O&M
contracts for three power plants in Brazil, as well as two in
Pakistan. Services' order intake for the review period
January-September totalled EUR 1,448 million (1,448).
For the review period January-September 2009 Wärtsilä's total order
intake amounted to EUR 2,468 million (4,750), which represents a
reduction of 48% compared to the corresponding period 2008.
ORDER BOOK
At the end of the review period Wärtsilä's total order book stood at
EUR 5,351 million (7,762), a decrease of 31%.
The Ship Power order book stood at EUR 3,230 million (5,010), -36%.
During the review period January-September 2009, cancellations of EUR
279 million materialised and were deducted from the order book. The
cancellations were mainly within the Merchant and Offshore segments.
Wärtsilä sees a cancellation risk of approximately EUR 650 million
(EUR 800 million at the end of the previous quarter).
At the end of the review period the Power Plants order book amounted
to EUR 1,549 million (2,243), which is 31% lower than at the same
date last year.
The Services order book totalled EUR 571 million (505) at the end of
the review period, an increase of 13%.
Third quarter order intake by business
MEUR 7-9/2009 7-9/2008 Change
Ship Power 68 450 -85%
Power Plants 170 498 -66%
Services 483 434 11%
Order intake, total 725 1 382 -48%
Order intake Power Plants
MW 7-9/2009 7-9/2008 Change
Oil 109 680 -84%
Gas 174 157 11%
Renewable fuels 35 35 0%
Order intake for the review period by
business
MEUR 1-9/2009 1-9/2008 Change 1-12/2008
Ship Power 262 1 674 -84% 1 826
Power Plants 748 1 620 -54% 1 883
Services 1 448 1 448 0% 1 858
Order intake, total 2 468 4 750 -48% 5 573
Order intake Power Plants
MW 1-9/2009 1-9/2008 Change 1-12/2008
Oil 879 1 739 -49% 2 029
Gas 468 1 033 -55% 1 240
Renewable fuels 35 80 -56% 80
Order book by business
MEUR 30 Sept. 2009 30 Sept. 2008 Change 2008
Ship Power 3 230* 5 010 -36% 4 486
Power Plants 1 549 2 243 -31% 1 949
Services 571 505 13% 445
Order book, total 5 351 7 762 -31% 6 883
*) Cancellations amounting to EUR 279 million have been eliminated
form the order book during the review period January-September 2009.
NET SALES
During the third quarter, Wärtsilä's net sales increased by 2% to EUR
1,167 million (1,140) compared to the corresponding period last year.
Net sales for Ship Power totalled EUR 378 million (344), a growth of
10%. Power Plants' net sales for the third quarter totalled 360
million (349), +3%. The third quarter net sales for Services amounted
to EUR 424 million (452), -6%.
Wärtsilä's net sales for January-September 2009 grew by 21% and
totalled EUR 3,741 million (3,082). Ship Power's net sales grew 29%
to EUR 1,230 million (952). Net Sales for Power Plants totalled EUR
1,169 million (797), a growth of 47%. Net sales from the Services
business remained stable and on a good level amounting to EUR 1,326
million (1,335). Net sales were evenly distributed between the
businesses during the review period January-September 2009. Ship
Power accounted for 33%, Power Plants for 31% and Services for 35% of
the total net sales.
Third quarter net sales by business
MEUR 7-9/2009 7-9/2008 Change
Ship Power 378 344 10%
Power Plants 360 349 3%
Services 424 452 -6%
Net sales, total 1 167 1 140 2%
Net sales for the review period by business
MEUR 1-9/2009 1-9/2008 Change 2008
Ship Power 1 230 952 29% 1 531
Power Plants 1 169 797 47% 1 261
Services 1 326 1 335 -1% 1 830
Net sales, total 3 741 3 082 21% 4 612
FINANCIAL RESULTS
The third quarter operating result was EUR 133 million (123), 11.4%
of net sales (10.8). For the review period January-September 2009,
the operating result before nonrecurring expenses rose to EUR 419
million (328), 11.2% of net sales (10.6). Wärtsilä recognised EUR 6
million of nonrecurring expenses related to the adjustment measures
taken within the Ship Power business in the second quarter.
Financial items amounted to EUR -25 million (5). Net interest
totalled EUR -14 million (-10). Dividends received totalled EUR 5
million (6). Profit before taxes amounted to EUR 388 million (333).
Taxes in the reporting period amounted to EUR 111 million (91).
Earnings per share were EUR 2.77 (2.42).
BALANCE SHEET, FINANCING AND CASH FLOW
Wärtsilä's third quarter cash flow from operating activities totalled
EUR 214 million (49). For January-September 2009 the cash flow from
operating activities was EUR 142 million (255). Net working capital
decreased by EUR 80 million during the third quarter, the main reason
being the favourable development of receivables. Advances received
decreased by EUR 104 million during the quarter. Net working capital
at the end of the period totalled EUR 511 million (102). Advances
received at the end of the period totalled EUR 1,039 million (1,375).
Net working capital has been exceptionally low in 2007 and 2008 due
to the high amount of advances received. Liquid reserves at the end
of the period amounted to EUR 262 million (158).
Net interest-bearing loan capital totalled EUR 575 million (369).
Wärtsilä had interest bearing loans totalling EUR 852 million (539)
at the end of September 2009. The existing funding programmes include
long term loans EUR 622 million, Committed Revolving Credit
Facilities totalling EUR 530 million and Finnish Commercial Paper
programmes totalling EUR 700 million. At the end of the period
non-utilised committed credit facilities totalled EUR 530 million. In
addition Wärtsilä has agreed on a EUR 30 million long-term loan that
will be disbursed in November 2009. The total amount of short-term
debt maturing within the next 12 months is EUR 230 million.
The solvency ratio was 35.4% (34.7) and gearing was 0.43 (0.34).
HOLDINGS
Wärtsilä owns 7,270,350 B shares in Assa Abloy, or 2.0% of the total.
This holding has been booked in the balance sheet at its market value
at the end of the reporting period, EUR 81 million.
CAPITAL EXPENDITURE
Gross capital expenditure in the review period totalled EUR 98
million (272), which comprised EUR 15 million (162) in acquisitions
and investments in securities, and EUR 82 million (110) in production
and information technology investments. Depreciation for the review
period amounted to EUR 91 million (68).
Capital expenditure for 2009 will be brought down from the previously
indicated level of EUR 180 million excluding acquisitions to
approximately EUR 160 million including acquisitions (EUR 366 million
in 2008).
STRATEGIC ACQUISITIONS, JOINT VENTURES AND EXPANSION OF THE NETWORK
Wärtsilä continued pursuing its strategy of expanding its network
with new service facilities in amongst others Ukraine, Cameroon,
Hungary, Chile and Dubai. The facilities provide a good base for
future service growth and expanding the network will remain one of
Wärtsilä's strategic focus areas also in the future.
In May, Wärtsilä acquired 60% of the shares of Wärtsilä Navim Diesel
of Italy, thus increasing its ownership of the company to 100%.
Wärtsilä Navim Diesel, which specialises in marine sales and service,
has a strong market position, particularly in the Cruise & Ferry
segment. The transaction resulted in EUR 8 million of new goodwill.
MANUFACTURING
The Ship Power market has substantially weakened since the economic
crisis began and the market shift to Asia continues stronger than
ever. As a consequence, Wärtsilä is in the process of analysing its
manufacturing footprint. Various alternatives are being evaluated for
adjusting to these changes in the market. The analysis will comprise
all manufacturing units with the major focus being on capacity
adjustments in Europe. The impact on different units will be
specified during the fourth quarter of 2009 and the first quarter of
2010. Wärtsilä has manufacturing units in Finland, Italy, the
Netherlands, Norway, Spain, the United Kingdom, China, India, Japan
and Korea.
RESEARCH & DEVELOPMENT
After performing successfully in a series of tests, the Wärtsilä
sulphur oxides (SOx) scrubber has been granted the Sulphur Emission
Control Area (SECA) Compliance Certificate by the classification
societies Det Norske Veritas and Germanischer Lloyd.
PERSONNEL
In May, Wärtsilä Ship Power announced that it had initiated the
formal process to reduce 400-450 jobs. The negotiations were
initiated to adjust to the substantially weakened global marine
market situation. The annual savings from these measures will be
approximately EUR 30 million. The effect of the savings will start to
materialise gradually from the second half of 2009, and will take
full effect by the end of 2010. In the second quarter Wärtsilä
recognised EUR 6 million of nonrecurring expenses in its operating
result related to the adjustment measures taken in the Ship Power
business. Altogether, Wärtsilä Ship Power employs sales, project
management, engineering services and ship design personnel in 30
countries.
Wärtsilä had 18,806 (18,268) employees at the end of September. The
average number of personnel during January-September 2009 totalled
18,897 (17,386). Services had 11,318 employees (10,623), a growth of
7%. The growth is mainly due to the expansion of the network,
recruitments in relation to new O&M contracts and the commissioning
of Wärtsilä Ship Power's and Power Plants' all time high deliveries.
SUSTAINABLE DEVELOPMENT
In the third quarter Wärtsilä signed the United Nations Global
Compact initiative and was registered as a participant by the UN
Global Compact Office. With this action Wärtsilä further consolidates
its commitment to sustainable business practices, and to the
compact's underlying principles in the areas of human rights, labour,
the environment and anti-corruption.
CHANGES IN MANAGEMENT
The following appointments have been made to Wärtsilä Corporation's
Board of Management, with effect from 1 August 2009:
Christoph Vitzthum (40) MSc (Econ.) has been appointed Group Vice
President, Services.
Vesa Riihimäki (43) MSc (Eng.) has been appointed Group Vice
President, Power Plants and a member of the Board of Management.
SHARES AND SHAREHOLDERS
SHARES ON HELSINKI EXCHANGES
30 September 2009 Number of Number of Number of shares
Shares votes traded 1-9/2009
WRT1V 98,620,565 98,620,565 110,203,929
1. Jan - 30 Sept 2009 High Low Average 1) Close
Share price 30.91 15.81 22.78 27.38
1) Trade-weighted average price
30 Sept. 2009 30 Sept. 2008
Market capitalisation, 2,700 2,905
EUR million
Foreign shareholders 46.2% 49.5%
DECISIONS TAKEN BY THE ANNUAL GENERAL MEETING
Wärtsilä's Annual General Meeting held on 11 March 2009 approved the
financial statements and discharged the members of the Board of
Directors and the company's President & CEO from liability for the
financial year 2008. The Meeting approved the Board of Directors'
proposal to pay a dividend of EUR 1.50 per share totalling EUR 148
million. Dividends were paid on 23 March 2009.
The Annual General Meeting decided that the Board of Directors shall
have six members. The following were elected to the Board: Ms Maarit
Aarni-Sirviö, Mr Kaj-Gustaf Bergh, Mr Kari Kauniskangas, Mr Antti
Lagerroos, Mr Bertel Langenskiöld and Mr Matti Vuoria.
The firm of authorised public accountants KPMG Oy Ab, was appointed
as the company's auditors.
Organisation of the Board of Directors
The Board of Directors of Wärtsilä Corporation elected Antti
Lagerroos as its chairman and Matti Vuoria as the deputy chairman.
The Board decided to establish an Audit Committee, a Nomination
Committee and a Compensation Committee. The Board appointed from
among its members, the following members to the Committees:
Audit Committee:
Antti Lagerroos, chairman
Maarit Aarni-Sirviö
Bertel Langenskiöld
Nomination Committee:
Antti Lagerroos, chairman
Matti Vuoria
Kaj-Gustaf Bergh
Compensation Committee:
Antti Lagerroos, chairman
Matti Vuoria
Bertel Langenskiöld
RISKS AND BUSINESS UNCERTAINTIES
Due to the uncertainty in the shipping industry the main risks in
Ship Power remain the slippage of ship yard delivery schedules and it
seems probable that some orders will be rescheduled or cancelled. As
a result of this development, Wärtsilä sees a cancellation risk of
approximately EUR 650 million.
In the Power Plant business, the impact from the financial crisis can
mainly be seen in timing of bigger projects.
In Services, the biggest risks still relate to a further
deterioration of the underlying situation within the shipping
industry leading to larger scale lay-ups of ships, which could reduce
demand for maintenance and services within this segment.
The current market situation has impacted the whole supply chain and
Wärtsilä is monitoring the stability of its supplier base. The risk
level has not significantly changed during the period.
The annual report for 2008 contains a thorough description of
Wärtsilä's risks and risk management.
MARKET OUTLOOK
Maritime freight rates are still on low levels. The lower new
building prices have attracted some owners to contract new vessels.
The overall situation is still challenging and it is difficult to
judge which direction the markets will take next. Wärtsilä's activity
in many segments of shipping is valuable as the weakness in some
segments is likely to continue at least another two years.
Wärtsilä Power Plants estimates to see improved order intake levels
along with the financing sector recovery and remains in a good
position to maintain its market shares.
Services continues stable and the large installed base, extensive
network, as well as the need for environmental upgrades provide a
solid market base.
WÄRTSILÄ'S PROSPECTS FOR 2009 REITERATED
Despite the risk of cancellations and the nonrecurring restructuring
items booked in the second quarter, the order book for 2009 should
support a 10-20 percent growth in net sales for 2009, which would
maintain profitability at last year's good level.
WÄRTSILÄ INTERIM REPORT JANUARY - SEPTEMBER 2009
This interim financial report is prepared in accordance with IAS 34
(Interim Financial Reporting) using the same accounting policies and
methods of computation as in the annual financial statements for
2008. All figures in the accounts have been rounded and consequently
the sum of individual figures can deviate from the presented sum
figure.
Use of estimates
The preparation of the financial statements in accordance with IFRS
requires management to make estimates and assumptions that affect the
valuation of the reported assets and liabilities and other
information, such as contingent liabilities and the recognition of
income and expenses in the income statement. Although the estimates
are based on the management's best knowledge of current events and
actions, actual results may differ from the estimates.
IFRS amendments
Of the amended International Financial Reporting Standards (IFRS) and
interpretations mandatory as of 1 January 2009 the following are
applicable to the Group reporting:
- IFRS 8 Operating Segments
- IAS 23 Borrowing Cost
- IAS 1 Presentation of financial Statement
- IFRIC 16 Hedges of Net Investment in a foreign Operation
The adaption of the revised standards and interpretations does not
have any material effect on the interim report.
This interim report is unaudited.
CONDENSED INCOME STATEMENT
MEUR 1-9/2009 1-9/2008 2008
Net sales 3 741 3 082 4 612
Other income 39 16 26
Expenses -3 279 -2 702 -4 015
Depreciation and impairment -91 -68 -99
Share of profit of associates and joint
ventures 5
Operating result 413 328 525
Financial income and expenses -25 5 -9
Profit before taxes 388 333 516
Income taxes -111 -91 -127
Profit for the financial period 277 242 389
Attributable to:
Owners of the parent 273 236 380
Non-controlling interest 4 6 9
Total 277 242 389
Earnings per share attributable to equity holders of the
parent company:
Earnings per share, EUR 2,77 2,42 3,88
Diluted earnings per share, EUR 2,77 2,42 3,88
STATEMENT OF COMPREHENSIVE INCOME
Profit for the financial period 277 242 389
Other comprehensive income after tax:
Exchange differences on translating
foreign operations 13 -3 -27
Investments available for sale 21 -32 -37
Cash flow hedges 24 -20 -44
Share of other comprehensive income of associates and joint
ventures -1
Other income/expenses 6
Other comprehensive income for the period 58 -54 -103
Total comprehensive income for the period 336 188 286
Total comprehensive income attributable
to:
Owners of the parent 331 181 277
Non-controlling interest 5 7 9
336 188 286
CONDENSED BALANCE SHEET
30 Sep. 31 Dec.
MEUR 30 Sep. 2009 2008 2008
Non-current assets
Intangible assets 791 794 793
Property, plant and equipment 465 408 446
Equity in associates and joint ventures 53 43 41
Investments available for sale 134 120 106
Deferred tax receivables 77 73 85
Other receivables 26 18 26
1 545 1 456 1 498
Current assets
Inventories 1 843 1 638 1 656
Other receivables 1 285 1 286 1 392
Cash and cash equivalents 262 158 197
3 390 3 082 3 245
Assets 4 935 4 538 4 743
Shareholders' equity
Share capital 336 336 336
Other shareholders' equity 1 031 753 848
Total equity attributable to equity
holders of the parent 1 367 1 089 1 184
Minority interest 12 14 15
Total shareholders' equity 1 379 1 102 1 199
Non-current liabilities
Interest-bearing debt 622 439 448
Deferred tax liabilities 89 83 86
Other liabilities 284 611 394
994 1 133 927
Current liabilities
Interest-bearing debt 230 99 216
Other liabilities 2 331 2 203 2 400
2 561 2 302 2 616
Total liabilities 3 556 3 436 3 544
Shareholders' equity and liabilities 4 935 4 538 4 743
CONDENSED CASH FLOW STATEMENT
MEUR 1-9/2009 1-9/2008 2008
Cash flow from operating activities:
Profit before taxes 388 333 516
Depreciation and impairment 91 68 99
Financial income and expenses 25 -6 9
Selling profit and loss of fixed assets and
other adjustments -8 -2 2
Share of profit of associates and joint
ventures -5 -1
Changes in working capital -204 -62 -250
Cash flow from operating activities before
financial items and taxes 289 331 377
Net financial items and income taxes -147 -75 -99
Cash flow from operating activities 142 255 278
Cash flow from investing activities:
Investments in shares and acquisitions -15 -131 -198
Net investments in tangible and intangible
assets -82 -103 -168
Proceeds from sale of shares -19 9 30
Cash flow from other investing activities 4 7 8
Cash flow from investing activities -113 -219 -329
Cash flow from financing activities:
New long-term loans 229 211 260
Amortization and other changes in long-term
loans -67 -55 -4
Changes in short term loans and other
financing activities 30 91 129
Dividends paid -156 -411 -412
Cash flow from financing activities 36 -164 -26
Change in liquid funds, increase (+) /
decrease (-) 65 -127 -76
Cash and cash equivalents at beginning of
period 197 296 296
Joint ventures' cash and cash equivalents -8 -18
Fair value adjustments, investments 1 1
Exchange rate changes -1 -4 -6
Cash and cash equivalents at end of period 262 158 197
STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY
Total equity attributable to equity holders
MEUR of the parent Minority Total
interest equity
Fair
value
Share and
Share issue Translation other Retained
capital premium differences reserves earnings
Shareholders'
equity on 1
January 2009 336 61 -27 50 764 15 1 199
Dividends -148 -8 -156
Total
comprehensive
income for
the period 16 41 274 5 336
Shareholders'
equity on 30
September
2009 336 61 -11 91 890 12 1 379
Shareholders'
equity on 1
January 2008 336 61 3 127 788 10 1 325
Dividends -408 -3 -411
Total
comprehensive
income for
the period -3 -52 236 7 188
Shareholders'
equity on 30
September
2008 336 61 0 75 617 14 1 102
Geographical distribution of net
sales Europe Asia Americas Other Group
MEUR
Net sales 1-9/2009 1 120 1 385 907 329 3 741
Net sales 1-9/2008 1 119 1 201 471 291 3 082
INTANGIBLE ASSETS AND PROPERTY, PLANT & EQUIPMENT
MEUR 1-9/2009 1-9/2008 2008
Intangible assets
Book value at 1 January 793 646 646
Changes in exchange rates 16 -3 -30
Acquisitions 12 156 191
Additions 13 22 29
Depreciation and impairment -43 -28 -42
Disposals and intra-balance sheet transfer 1 -1
Book value at end of period 791 794 793
Property, plant and equipment
Book value at 1 January 446 377 377
Changes in exchange rates 1 2 -3
Acquisitions 1 9 9
Additions 69 88 139
Depreciation and impairment -49 -40 -57
Joint ventures' opening balances -20 -6
Disposals and intra-balance sheet transfer -4 -7 -13
Book value at end of period 465 408 446
GROSS CAPITAL EXPENDITURE
MEUR 1-9/2009 1-9/2008 2008
Investments in securities
and acquisitions 15 162 198
Intangible assets and
property, plant and
equipment 82 110 168
Group 98 272 366
During the review period investment in the enlargement of propulsion
equipment manufacturing in the Netherlands and China amounted to EUR
7 million, and Wärtsilä had commitments related to the enlargements
amounting to EUR 1 million at the end of the review period. Wärtsilä
centralises warehousing and logistics of spare parts by investing in
a new distribution centre in the Netherlands. The investments to the
new distribution centre amounted to EUR 3 million during the review
period and commitments related to the investment were EUR 63 million
at the end of the review period.
INTEREST-BEARING LOAN CAPITAL
MEUR 30 Sep. 2009 30 Sep. 2008 31 Dec. 2008
Long-term liabilities 622 439 448
Current liabilities 230 100 216
Loan receivables -15 -12 -12
Cash and bank balances -262 -158 -197
Net 575 369 455
FINANCIAL RATIOS 1-9/2009 1-9/2008 2008
Earnings per share, EUR 2,77 2,42 3,88
Equity per share, EUR 13,86 11,04 12,01
Solvency ratio, % 35,4 34,7 34,3
Gearing 0,43 0,34 0,39
PERSONNEL
1-9/2009 1-9/2008 2008
On average 18 897 17 386 17 623
At end of period 18 806 18 268 18 812
CONTINGENT LIABILITIES
MEUR 30 Sep. 2009 30 Sep. 2008 31 Dec. 2008
Mortgages 56 13 61
Chattel mortgages 9 7 10
Total 66 21 71
Guarantees and contingent
liabilities
on behalf of Group companies 809 436 664
on behalf of associated
companies 8
Nominal amount of rents
according
to leasing contracts 81 74 87
Total 897 510 751
NOMINAL VALUES OF DERIVATIVE INSTRUMENTS
MEUR Total amount of which closed
Interest rate swaps 90
Foreign exchange forward contracts 1 411 285
Currency options, purchased 52
COMMODITY DERIVATIVES Amount in of which
metric tons closed
Oil swaps 4 275
Copper futures 300
CONDENSED INCOME
STATEMENT, QUARTERLY
MEUR 7-9/2009 4-6/2009 1-3/2009 10-12/2008 7-9/2008 4-6/2008
Net sales 1 167 1 333 1 241 1 530 1 140 1 092
Other income 20 13 5 10 6 5
Expenses -1 026 -1 167 -1 087 -1 313 -996 -953
Depreciation
and impairment -31 -30 -30 -31 -26 -21
Share of profit
of associates
and joint
ventures 3 1 1 1 -1 1
Operating
result 133 149 130 197 123 124
Financial
income and
expenses -9 -9 -7 -14 5 7
Profit before
taxes 125 141 123 183 127 131
Income taxes -38 -39 -34 -36 -30 -36
Profit for the
financial
period 87 102 89 147 97 96
Attributable
to:
Owners of the
parent 86 100 87 144 95 94
Non-controlling
interest 1 2 1 3 3 2
Total 87 102 89 147 97 96
Earnings per share attributable
to equity holders of the parent
company:
Earnings per
share, EUR 0,87 1,01 0,89 1,46 0,97 0,96
CALCULATION OF FINANCIAL RATIOS
Earnings per share (EPS)
Profit for the period attributable to equity holders of the parent
company
Adjusted number of shares over the period
Equity per share
Equity attributable to equity holders of the parent
company
Adjusted number of shares at the end of the period
Solvency ratio
Shareholders' equity x 100
Balance sheet total - advances received
Gearing
Interest-bearing liabilities - cash and bank balances
Shareholders' equity
21 October 2009
Wärtsilä Corporation
Board of Directors
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